Customs Failed To Quantify Duty, Can't Blame Traveller For Delay In Redeeming Gold: Delhi High Court

The Delhi High Court has held that a passenger cannot be faulted for failing to redeem confiscated gold within the stipulated period when the Customs Department itself failed to quantify and communicate the applicable duty, despite receiving his request within time.

The Division Bench of Justices Anil Kshetarpal and Vimal Kumar Yadav accordingly directed the Customs authorities to communicate the duty payable on 12 gold bars weighing 1,200 grams and release the gold upon payment of the duty, redemption fine, penalty and applicable interest.

For context, Petitioner was intercepted with the gold bars at Delhi airport. The Customs authorities confiscated the gold on November 18, 2022, while granting him an option to redeem it on payment of the applicable duty and ₹50,000 each towards the redemption fine and penalty.

He had 120 days to exercise the redemption option. On December 28, 2022, within the prescribed period, he approached Customs seeking quantification of the applicable duty.

However, the authorities never communicated the amount of duty payable.

The Customs Department relied upon the High Court's earlier decision in Gillette India Ltd. v. Commissioner of Customs, which held that where the option of redemption is not exercised within the stipulated period, confiscation becomes absolute under Section 126 of the Customs Act, 1962.

The Court, however, found that the principle in Gillette India did not preclude relief to the Petitioner in the present circumstances.

It noted that Petitioner had approached the authorities within the prescribed period, specifically seeking quantification of the amount necessary to exercise his redemption option. The Customs authorities failed to respond to that request.

“In these circumstances, the Petitioner has not committed any default in complying with aforesaid Order-in-Original and the failure is on the part of the Respondents…the failure to exercise the option of redemption within the stipulated period cannot, in the facts of the present case, be attributed solely to the Petitioner,” the Court observed.

As such, it directed Customs to communicate the applicable duty within 15 days and release all 12 gold bars after payment.

For Petitioner: Advocates Upender Thakur, Shreya Kardam and Karishma Singh.

For Respondents: Anushree Narain, SCC along with Mr. Apurv Yadav and Mr. Naman Choula, Advs.